Football Clubs in Administration

Debate between Tom Greatrex and Alison Seabeck

Wednesday 6th July 2011 Commons Chamber

[Alison Seabeck (Plymouth, Moor View) (Lab)]

No town or city wants to see its football team go into administration, and it certainly does not want it to be docked 10 points, which leaves it with an even bigger mountain to climb, but that is what has happened to Plymouth Argyle.

The club’s problems do not end there, and I would like to draw on its experience to highlight the problems undoubtedly experienced by the 36 English clubs that have gone into administration since Charlton Athletic did so in 1984. I hope that the Minister will share these concerns, and go away, investigate and discuss them with those involved in running football. I do not want to see another club go through what Plymouth Argyle has gone through. I am sure that their best known supporter, Michael Foot, will be turning in his grave; indeed, in some ways I am pleased that he is not here to see what has happened and the misery that has been heaped on loyal staff and supporters, because he followed the club through good times and bad.

There were good times, and I must thank Gordon Sparks—Sparksy—for reminding me of some of the highlights of a club which was formed in 1886, joined the Football League in 1920 and got to the FA Cup semi-finals in the 1983-84 season—the same year in which the team were league two champions. I also thank Lee Jameson on behalf of the supporters for the information that he gave me in preparation for this debate. Plymouth has an incredibly loyal “green army” of supporters—and there are at least two of us in the Chamber—but their patience has been sorely tested.

Following a winding-up petition in November 2010, the staff faced Christmas without full pay packets. Learning from Exeter City’s experience, the supporters rallied round, and in December set up a trust designed to offer support to the then board and raise funds to support the staff and their families.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

My hon. Friend mentioned the establishment of a supporters trust, and I declare an interest, as I was involved in the establishment of the Fulham supporters trust some eight years ago. The important role of Supporters Direct in helping to support supporters such as those in Plymouth who are setting up a trust should not be underestimated. Does she agree that it is regrettable that the funding for Supporters Direct is under threat because of the problems that the premier league has with the former chief executive? I hope that the Minister can help to persuade those involved to resolve that problem as soon as possible.

[Alison Seabeck]

My hon. Friend makes an interesting point, and I hope that the Minister has heard his plea, because supporters trusts and Supporters Direct have been immensely helpful to a number of clubs.

In Plymouth the staff have been asked to sign away or defer payment of their salary. In the main, we are talking about some very low-paid people who were presented with a form to sign after the club to which they feel great loyalty was threatened with closure. With little opportunity to obtain expert advice on whether signing was the right thing to do, they signed, and most have struggled since, signing further salary deferrals. Some have now had no option but to take redundancy. The hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile) and I spent quite a lot of time with the staff looking into their problems; none the less, they are in a difficult position.

The irony is that these are the very people who are keeping the ground in condition to start the next season. The players are protected to some extent by the Professional Footballers Association, and I had a brief word with Gordon Taylor about the position. He shared my concern that there was no protection for all the other staff. It was a struggle to see last season out, with relegation almost guaranteed, despite some amazing and spirited performances by a team that must have been feeling the pressure. Peter Ridsdale stepped in when most of the old board resigned and, in all fairness, worked to get to the bottom of the finances and pay key bills. At the time, he was welcomed. Help also came, as I have said, from the Plymouth Argyle Supporters and Training and Development Trust, which lent the club a not insubstantial amount. Then came the cloak and dagger stuff—the secret discussions between the administrator and various bidders. Plymouth’s local paper, The Herald, struggled to get to the bottom of the question of who they were.

We have all had concerns about what checks have been carried out to ensure that they are fit and proper people to run and sustain a football club. Where are the assurances of the ability of these bidders to meet the financial demands of running a club? Rumours have circulated about what various bidders might have wanted as part of the deal, and concerns have been expressed that they might asset-strip, including developing the current practice ground. Although no one has said that this is true, it does not help to build confidence in those most closely linked to the club, especially the supporters.

What checks are carried out by the Football League on such matters? Very few, I suspect, yet this is a sport of national importance. Where is the transparency that the administrator promised in a BBC interview? Nine days later he was quoted as saying that he did not have to know who was financing the bid. Given the amount of money that circulates at the top of football among clubs which, in some cases, use the lower division clubs as nurseries for up-and-coming stars of the future, I find it astonishing that some contribution could not come from them and/or from the Football League clubs to support the administration and ground staff when such circumstances arise, as a sort of insurance policy.

Others are affected too, especially small businesses linked to football clubs. The Federation of Small Businesses has pointed out that most football clubs operate as small or medium-sized enterprise, employing fewer than 250 people and, like other small businesses, often find it difficult to access credit from the major banks. As a result they often turn to smaller creditors, and similarly contract through many small companies. The impact of such a business going into administration can, therefore, have a knock-on effect on several other local businesses.

I ask the football authorities to look again at the negative impact of the points docking system. Is it really achieving their original aim? Is it punishing the right people? Will the Minister explain why the rules for football clubs placed in administration are different from those for other companies? I believe that Lord Sugar has in the past expressed concern about this.